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Government be an early and substantial customer of a private

sector system is an alternative which we believe warrants

serious consideration.

With respect to international arrangements, we

believe it is too early to speculate on how an international

system might be formed.

Until the institutional structure

for the U. s. national ERIS program is resolved, it would

not appear productive to speculate on potential arrangements for an international system. These questions can best be

considered at a later time by the ERIS operator in conjunction

with interested Government agencies.

What are the proper Government/private sector relationships?

The reports prepared for the Committee contemplate

an increasing responsibility in the private sector for an operational ERIS. It is suggested that such transfer could

be facilitated if the Government were an early, major

customer of a private sector system.

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However, while the

goal, and means, of early transfer of responsibility to the

private sector are suggested, the remaining discussion sets

forth two reasons why an early transfer should not take place.

First, with respect to the space segment, the report

assumes that a Landsat type system will form the basis of

ERIS and that the development costs of such a system "do not

appear to afford possibilities of practical private venture

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for this class of satellite."

Given the costs for the first

Landsat-D mission of $290-330 million estimated by GAO, *

this statement is probably true, unless the Government were to lease a substantial portion of the satellite facility

from a private sector operator, as in the case of TDRSS.

However, the statement neglects the fact that technology

other than that used in the Landsat programs is available,

that such technology can satisfy requirements that cannot

be met by a Landsat type system, and that substantial cost

savings may be possible through use of such technology.

Thus,

private sector investment in space segment facilities could

be contemplated if the market for particular kinds of data services and products justifies the investment risk.

Second, the report states that "public or international sensitivities probably mitigate against a private sector operation at this stage." No justification for

this statement is given nor is there any discussion whether arrangements can be envisioned which would satisfy legitimate

concerns with private sector ownership and operation of an ERIS. We believe there are means to protect those legitimate

*Report to the Congress by the Comptroller General of the United States, Landsat's Role in an Earth Resources Information System, PSAD-77-58 (1977).

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interests and that private sector investment in an ERIS

need not be dismissed on such grounds.

A potential role for the private sector is seen

in the provision of a TDRSS type satellite-to-ground data

relay link for ERIS.

The report suggests that an appro

priate role for the private sector would be to supply such

a service "with the government buying a guaranteed level of

service."

Given the cost of TDRSS services recently procured

by the Government ($781 million for ten years of service), use of a separate TDRSS type data link for ERIS probably

would result in such a high investment cost for ERIS so as

to preclude any private sector initiatives.

A more economical

alternative would be to use foreign earth stations and the

INTELSAT system for data relay.

The discussion of the data handling segment con

templates a centralized governmental activity which would

place all basic data products in the public domain. The role of the private sector would be limited to the provision

of "value-added services."

The effect of such scheme would

be to preclude private sector initiatives in the provision of space segment services as well as data handling services.

Obviously, if the Government in effect competes in the provision of data products to the public and to its own con

stituent agencies, the private sector would be precluded from such activity.

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In summary, we believe that while it is recognized

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that there are means by which to encourage private sector

initiatives with respect to establishment of an ERIS,

certain

system assumptions are adopted which create an environment of

discouraging private sector initiatives. These system assumptions are based on the Landsat experimental programs

and we question their validity with respect to an operational

ERIS. Before the question of public/private sector relationships should be resolved, we believe it is first necessary to address the recognized deficiencies in the present experi

mental programs and then determine how the respective resources

and capabilities of the public and private sectors can be

applied to correct those deficiencies and provide the data

products and services which are desired by the user community.

What should be the involvement of not-for-profit organizations in ERIS?

The primary focus in the discussion materials regarding the role of not-for-profit organizations is in the

area of technology transfer.

While we agree training in the

use of ERIS data services and products is necessary

co broaden

the user base and ensure the benefits of the technology are

widely distributed, the appropriate extent of actual tech

nology transfer raises significant questions regarding the

maintenance of U. s. technological leadership.

The role of

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the not-for-profit institutions, therefore, should be

consistent with overall U. S. policies with respect to

the transfer of technology.

What are the possibilities for participation of other countries in ERIS and what are their responsibilities?

We agree that there are a number of arrangements

which can be envisioned for participation of other countries in ERIS. In the initial phases, it would appear that the primary concer

ern will be to ensure that effective utilization

of the system is available to foreign countries, consistent

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lishment of an operational ERIS by the United States can

proceed prior to resolution of all questions involving

international participation.

Who should operate the various segments of the system?

The reports prepared for the Committee assume

that the Government will operate the space segment of ERIS

and that NASA is a logical choice as system operator.

This

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